Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 179

DECLARATION by David Graff re 178 MOTION for Summary Judgment filed by Epic Media Group, Incorporated (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H) (Delgado, William)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN

THE WEATHER UNDERGROUND, INC.,
a Michigan corporation,
Plaintiff,
Case No. 2:09-CV-10756
Hon. Marianne O. Battani

vs.
NAVIGATION CATALYST SYSTEMS, INC.,
a Delaware corporation; CONNEXUS CORP.,
a Delaware corporation; FIRSTLOOK, INC.,
a Delaware corporation; and EPIC MEDIA
GROUP, INC., a Delaware corporation,

Defendants.
______________________________________________________________________
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Attorneys for Plaintiff

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
Anthony P. Patti (P43729)
BUTZEL LONG, P.C.
HOOPER HATHAWAY, PC
150 West Jefferson, Suite 100
126 South Main Street
Detroit, MI 48226
Ann Arbor, MI 48104
[phone]
734-662-4426
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff
Local Counsel for Defendants
______________________________________________________________________
DECLARATION OF DAVID GRAFF IN SUPPORT OF
EPIC MEDIA’S MOTION FOR SUMMARY JUDGMENT

I, David Graff, declare as follows:
1.

I am over the age of eighteen and am the General Counsel of The Epic Media

Group, Inc. (“Epic Media”), defendant in this matter. In my role as General Counsel, I am
familiar with the acquisition of Connexus Corporation and its subsidiaries (collectively
“Connexus” unless otherwise indicated) and the overall legal structure and management of Epic
Media and its subsidiaries.
2.

In addition, I was designated as the 30(b)(6) designee for Epic Media on the

following topics requested by Plaintiff: (i) the agreement between Epic Media and Connexus; (ii)
the acquisition of Connexus; (iii) the creation and operation of Emerald Acquisition Group One
(“Emerald”); and (iv) the governance structure of Epic Media and its subsidiaries. To prepare
for that deposition, I reviewed various company documents that pertain to these topics and
consulted with other corporate officers to educate myself as much as possible. I appeared for
deposition on June 24, 2011.
3.

Based on the foregoing, I have personal knowledge of the facts stated herein

except where stated on information and belief, and, as to those matters, I believe them to be true.
4.

Azoogle.com, Inc. (“Azoogle.com”) created Emerald on March 17, 2010 as a

wholly-owned subsidiary for the specific purpose of acquiring Connexus Corporation through a
reverse triangular merger. Attached as Exhibit A is a true and correct copy of Emerald’s
certificate of incorporation filed with the state of Delaware.
5.

Emerald was merged into Connexus on May 4, 2010, with the separate existence

of Emerald ceasing and Connexus remaining as the surviving entity and wholly-owned

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subsidiary of Epic Media. Attached as Exhibit B are true and correct copies of relevant excerpts
of the Merger Agreement.
6.

As a result of the merger between Emerald and Connexus, the outstanding capital

shares of Emerald were converted into a capital share of Connexus. Then, the capital shares of
Connexus stock outstanding immediately before the effective time of the transaction with
Emerald were converted into capital shares of Epic Media.
7.

Prior to the acquisition described, above, Azoogle.com, a Delaware corporation

with its principal place of business at 512 Seventh Avenue, New York, New York, was doing
business as Epic Advertising.
8.

Immediately prior to the acquisition, Azoogle.com had three subsidiaries:

AzoogleAds, U.S., Inc., Epic Advertising Limited, and Online Intelligence, LLC (collectively
the “Epic-Side Subsidiaries”).
9.

After acquiring Connexus as a fourth subsidiary, Azoogle.com changed its name

to The Epic Media Group, Inc., the defendant in this case.
10.

The operating expenses for Epic Media and the Epic-Side Subsidiaries are paid

out of bank accounts at RBC Bank which were owned by Azoogle.com.
11.

The payroll for Epic Media and the Epic-Side Subsidiaries is processed by ADP

and paid under the Employer Identification Number (“EIN”) used by Azoogle.com prior to the
acquisition. Attached as an example is Exhibit C, a true and correct copy of the ADP Statement
of Deposits and Filings for AzoogleAds U.S., Inc., showing a Federal ID 20-3650814.
12.

The Epic-Side Subsidiaries have their own (consolidated) general ledger in the

company’s Oracle financial system.

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13.

Revenue and expenses associated with contracts for Epic Media and the Epic-Side

Subsidiaries are recorded in their general ledger.
14.

Epic Media and the Epic-Side Subsidiaries have their own set of assets (e.g.,

furniture, computer equipment, etc.).
15.

As a general matter, the Epic-Side Subsidiaries continue to engage in the same

business in which they were engaged prior to the acquisition, and they are run by individuals that
had been employees of Azoogle.com prior to the acquisition. AzoogleAds is an advertising
network that is overseen by Donald Mathis. Epic Advertising Limited is also an advertising
network based in the United Kingdom run by Adam Alter. Online Intelligence is a fraud and
detection service that is run by EJ Hilbert.
16.

Prior to its acquisition, Connexus Corporation, a Delaware corporation, had its

principle place of business in El Segundo, California with an ancillary office for members of
Firstlook at 335 Madison Ave., Suite 840, New York, New York.
17.

At the time of the acquisition, Connexus had three subsidiaries: Firstlook, Traffic

Marketplace, and Netblue Vietnam Ltd. (the “Connexus-Side Subsidiaries”).
18.

Following the acquisition, Connexus is an active corporation, in good standing,

which continues to have the same subsidiaries. Attached as Exhibit D is a true and correct copy
of the Certificate of Good Standing for Connexus Corporation. Attached as Exhibit E is a true
and correct copy of the Certificate of Good Standing for Firstlook, Inc.
19.

Some Connexus employees were laid off as the legal and financial departments of

the two companies were integrated, and redundancy was eliminated.

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20.

The operating expenses of Connexus and the Connexus-Side Subsidiaries are paid

out of its bank accounts at Wells Fargo which accounts belonged to Connexus and its
subsidiaries prior to the acquisition.
21.

Connexus has maintained its own employees and its payroll is processed by ADP

and paid under Connexus’s original EIN. Attached as an example is Exhibit F, a true and correct
copy of the ADP Statement of Deposits and Filings for Connexus Corporation showing a Federal
ID 95-4763332.
22.

Connexus and its subsidiaries maintain their own (consolidated) general ledger in

the Oracle financial system. Attached as Exhibit G is a schematic layout of how the separate
ledgers are organized within Oracle.
23.

The Connexus-Side Subsidiaries continue to generate revenue. Attached as

Exhibit H are the Income Statements for the Connexus-Side Subsidiaries for January through
April of 2011.
24.

Revenue and expenses associated with contracts for Connexus are recorded in

Connexus’s general ledger.
25.

Connexus and the Connexus-Side Subsidiaries have their own set of assets (e.g.,

furniture, computer equipment, etc.).
26.

Connexus’s assets have not been transferred or sold to Epic Media or any other

entity since the acquisition.
27.

The Connexus-Side Subsidiaries continue to engage in the same business in

which they were engaged prior to the acquisition, and they are operated by individuals who were
employees of Connexus prior to the acquisition. Firstlook continues to be a domain name

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CERTIFICATE OF SERVICE

I hereby certify that on July 15, 2011, I electronically filed the foregoing paper
with the Court using the ECF system which will send notification of such filing to the
following:
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Attorneys for Plaintiff

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
BUTZEL LONG, P.C.
150 West Jefferson, Suite 100
Detroit, MI 48226
[phone]
[e-mail]
[e-mail]
Local Counsel for Defendants

Anthony P. Patti (P43729)
HOOPER HATHAWAY, PC
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Attorneys for Plaintiff

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

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